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Business Strategy

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1.0 Introduction

This report is based on a Strategy Simulation Management where you put your decisions and this program interprets it in real life industry. StratSimManagement ties all functions together: Marketing, Operations, Finance, HR. Basically it is a cross functional long term strategy.

StratSimManagement is based on automobile industry,

Ð'* two markets: consumer and fleet (B2B),

Ð'* consumer market of 150 million people,

Ð'* B2B market of numerous fleet contracts

Ð'* Currently GDP, inflation growth rates

Ð'* Demand sensitivity on GDP, Interest rates and the decisions that the firms makes

The products are cars and trucks and some of their characteristics are vehicle class, size, engine/performance, interior, styling, safety, quality and prices.

Product classes are economy, family, sport, luxury, minivan, utility, and truck. In additions there are two other classes if they are developed Hybrid and Delivery Vans.

Firm B (Best Motor Works) which I am doing the report was manufacturing only three classes at moment. There were Buzzy (economy), Boffo (family car), Boss (Truck).

The decisions they were allowed to take were on: Technology, Concept creation, Product, Consumer marketing, Manufacturing, Distribution s and Finance.

On this stimulation the firm were also given means to test the market, competitive mapping, and portfolio analysis.

Basically revenues are generated through sales of cars and trucks to automobile dealers in the StratSim world.

2.0 Mission and Vision

Automotive industry is growing very rapidly. To manufacture the leading vehicle within a product class is well worth. Therefore, it is dangerous tempt to fall behind the times of styling and performance.


Mission statement defines scope and boundaries of the business serving as a identity statement. In this statement communicates the vision in more specific terms.


Vision statement is a short statement which expresses long term image of the future intents.

The firms Mission and Vision

"To be the leading manufacture in the industry and at the same time providing value for our customers"

"Our vision is to be leading quality, technology, innovation, and design"

3.0 External and Internal Analysis

External Analysis

Analysis of external business environment is a vital element for business strategy success. Analysing external environment helps the business be aware of unexpected changes which can result in business struggle to cope.

Main tools for this analysis are Macro-environment (PESTEL), sources of competition (Porters Five Forces) and Strategic gaps Opportunities and Threats

Internal Analysis

Internal analysis is as important as external. This tool assists the organisation with an examination of its strength and weakness in most of the areas of the business such as: Management Capabilities and Financing capabilities. For example management capabilities we could look at the organisation structure: does the organisation structure hinder or facilitate a free flow. Staffing: are staff roles clear or do they have regular training and feedback to ensure high performance. Financing it would be the organisation self-financing shareholders (who fund the business)- what is the business level of self-financing, or outside financing- money borrowed from bank- how stable are this sources.

Lecture Slides

So this analysis is being look in more depth there are other tools of examination such as Porster's Value Chain. This value chain breaks the functions into its activities. The bottom half of the figure show the primary activities that the firm conducts. And the top half of the graph represents a set of activities that are conducted to support the primary activities of the firm.

Let's put primary activity into an example, Firm B raw material is being handle, put into warehouse, than take this inputs to assembling parts and into Cars. Than they will store it and distribute it. Marketing and sales is very important as they will give the product (car) an image, meet customer targeted needs. Then services which includes areas of services such as after-sale, complaint handling. Internal analysis of this service helps the firm identify gaps and add importance to minimise those gaps.


PESTEL stands for Political, Economic, Socio-Cultural, Technological, Environmental and Legal.

This important tool not only outlines a list of influences but also help the business understand key drivers of change which has differential impact on industries and markets. Eventually focus in on future impact of environmental factors.

United States has a political stability but there are decisions made from the government that can affect the firm. Factors which can affect the firm can be minimum wage, petrol, health and safety, and other regulation which the government can amend at anytime. For example minimum wage can touch costs of labour if is to go up. Let's look at petrol as is a necessity for a car to drive for example prices are rising everyday and the control over price is all on governments' hands.

Economical considerations consists a wide range of factors that affect businesses in this case the car industry. In USA climate of the economy influences how the consumer behaves within the society. Whether the economy is a boom or recession will also affect consumer confidence and behaviour. Interest rates tend to affect consumers expenditure Ð'- if it goes high people with mortgages hold back as their disposable income is being affected. Interest rates could affect the firm directly Ð'- for example if they borrowing money they will have to pay more in return.

They should also consider society



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